Poverty Measures and Dichotomy of Urban-Rural Poverty

Abstract

Determination of the number of poor people in any society depends crucially on the poverty measures used. Different measures will give different figures. The most commonly used figure is the “poverty line”, which itself is a difficult and controversial concept. Concerns with identifying people affected by poverty and the desire to measure it have at times obscured the fact that poverty is too complex to be reduced to a single dimension of human life. It has become common for countries to establish an income-based or consumption-based poverty line. The World Bank also uses income-measure method adjusted to purchasing power parity (PPP), albeit to also monitor income inequality within individual countries and regions. Since 1990, the World Bank has used one-dollar-a day measure until 2008, when a revised figure of 1.25 at 2005 PPP replaced the initial standard [4]. Although income focuses on an important dimension of poverty, it gives only a partial picture of the many ways human lives can be blighted. Someone can enjoy good health and live quite long but be illiterate and thus cut off from learning, from communication and from interactions with others. Another person may be literate and quite well educated but prone to premature death because of epidemiological characteristics or physical disposition. Yet in a third case, someone may be excluded from participating in the important decision making processes affecting her life. The deprivations described here cannot be fully captured by mere level of income. It is notable that income measure does not include any in-kind transfers of resources between individuals comprising households [2].